Insurance Brokers: Who They Are, What They Do, and Do You Need One?
Health insurance brokers provide a number of services for those seeking to purchase health insurance - whether as an individual or commercially. In addition to assisting buyers in the purchasing of health insurance, brokers typically provide continuing services to policy holders throughout the life of the policy, so choosing the right broker can be an important and sometimes long term decision.
For individuals and some small businesses, the ACA marketplace (whether the federal or a state-operated exchange) is a viable option for purchasing coverage directly from health insurance providers. For larger employers seeking to purchase coverage for company employees – a health insurance broker or agent is commissioned to provide guidance in determining the appropriate policy and procuring/administering the policy in conjunction with the insurance provider that is underwriting the coverage.
There are several factors to consider when determining whether you and/or your business would be better suited to working with a health insurance broker or whether you ought to contact a health insurance agent to address your coverage needs.
The primary distinction between brokers and agents is that agents typically only represent (or sell policy coverage on behalf of) one insurance company whereas brokers are a type agent that typically work directly with anywhere from one to several different insurance companies at the same time. With the wealth of information about their policy offerings that insurance providers make publicly available, you may be able to narrow down your search to a single, specific insurance provider, in which case contacting an agent that works directly with that insurance provider would be the most direct path to obtaining coverage. Similarly, if the industry in which you operate your business has any special insurance considerations that need to be accounted for in policy/coverage decisions, then contacting an agent with relevant experience who has previously worked with companies in your industry can be an efficient approach.
On the other hand, for those individuals or businesses who are entering the health insurance market with less familiarity and may not have yet have determined their exact needs in advance, sometimes contracting a health insurance broker that works with several insurance providers can potentially provide a greater range of policy options in determining the best coverage fit.
Finding the best broker or agent to suit your needs depends upon first determining what it is that you need. If you know exactly the kind of policy you want and which insurer you’d like to work with, then choosing your agent or broker may be simply a question of experience in your industry, or locational proximity, or complementary personalities, or all of the above.
Alternatively, if you haven’t yet determined your needs and you’re seeking significant guidance in figuring out exactly the type of coverage that is best for you and your company, then you might prefer to work with a broker whose multiple insurer affiliations provide a wide-range of policy coverage choices, or working with a broker that has specific experience in your industry might be even more helpful, or perhaps you’d like to work with a broker with both attributes.
Because of the continuing nature of the broker/agent and policy holder relationship, an understanding of your company needs both in the present and as your business continues to grow and evolve should be primary considerations when evaluating compatibility with a potential broker or agent. For this reason, it can be very helpful to inquire about a potential broker’s/agent’s background before (or outside of) their career in the health insurance industry if there are any aspects to your business for which specific background knowledge may be beneficial.
With an understanding of what you’re looking for in mind, the next step is to locate and vet potential broker/agent candidates. At a bare minimum, health insurance agents and brokers alike both require proper licensure from the state in order to operate, and there are several independent organizations from which some useful information about brokers and agents can be obtained and/or verified, such as the National Association of Health Underwriters (NAHU) and Health Agents for America Inc. (HAFA). Additionally, many times local civic organizations and business collectives can be great resources when seeking or vetting independent brokers and agents. Further, referrals business based on reputational recognition have long been mainstays in the health insurance brokerage business.
As technology has evolved, so has the health insurance brokerage business as well as the means by which potential clients can search for and evaluate brokers and agents. To stand out from the crowd, many brokers and agents have become more specialized than ever in an effort to differentiate themselves and carve out a niche expertise. Also, for some clients, geographic considerations are less of a concern than ever before because of instant, omnipresent communications technology, while because of that same omnipresent communications tech, others might feel that having a local agent is more valuable than ever. Regardless of what you and your business are looking for, luckily the database technology has kept up - allowing you to search for health insurance brokers and agents in your local area and/or that specialize in your industry then sort by whatever additional criteria are most important to you - whether data-driven performance ratings, insurance provider affiliations, customer reviews, or a number of other criteria. Click here and see why searching for and vetting the right broker or agent for you and your business is easier now that it has ever been before.
About Mployer Advisor
At Mployer Advisor, our focus is creating transparency in the insurance and insurance broker, consultant and advisor space to the advantage of the employer. Analytics is our core and we will bring to light new information, tools and resources to aid employers in making more cost-effective decisions. As a phase I, we are here to help employers find the right broker or consultant and the right insurance company for them. Giving choice and initial transparency is a first step in creating an employer centric insurance marketplace.